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Baumol's cost disease cited to explain Japan's cheap goods and costly services

1 article1 sourcesince Oct 10Last article 2h ago ·

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An X post by the account Orange AI (@oran_ge), dated 2026-10-10, argues that Japan's cheap goods and expensive services reflect Baumol's cost disease.

The post says economist William Baumol described this pattern in 1966, observing that labor-intensive services such as string quartet performances gain no productivity while goods do. Goods can be automated and fall in price, while services such as haircuts and massages stay tied to human labor and rise in cost. The author also says the same theory explains why software has lost value. The post is the only report on this claim in the source material.

Written by AI from the articles below · updated Oct 10, 9:32 AM ET

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Latest developmentOct 10, 9:00 AM ET
Baumol's cost disease explains why Japanese goods are cheap but services are expensive

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Oct 10
  1. Orange AIX
    Baumol's cost disease explains why Japanese goods are cheap but services are expensive

    AIThe post argues that Japan's cheap goods and expensive services reflect Baumol's cost disease, named after economist William Baumol's 1966 observation that labor-intensive services like string quartets gain no productivity while goods do. Goods can be automated and get cheaper, while services such as haircuts and massages stay tied to human labor and rise in price. The author says the same theory explains why software has lost value.

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